Staff Reporter

Moneylenders to be brought under the law

  • Calls for SEBI-like body to control non-banking financial institutions
  • Says rise of `blade mafia' has cascading effect on growth of the underworld

    KOTTAYAM: The ruling Left Democratic Front (LDF) will seriously deliberate on the issue of introducing a comprehensive debt relief Act which will protect the interests of small farmers and those who have taken loans from private moneylenders at cut-throat interest rates, Communist Party of India (Marxist) State secretary Pinarayi Vijayan has said.

    Inaugurating a State-level workshop against `blade mafia' organised by the Democratic Youth Federation of India (DYFI) here on Wednesday, Mr. Vijayan stressed the need to take a comprehensive approach in tackling the threat posed by loan sharks, including legislative and law-enforcing measures, policy changes and a campaign for effecting attitudinal changes.

    The realistic approach, he said, would be one that accepted the reality of the presence of the so-called blade mafia in society. One of the ways being contemplated was effecting necessary changes in the money lenders' Act which would bring blade companies under its purview, Mr. Vijayan said. The State could take cue from the Tamil Nadu Protection of Interests of Depositors Act in dealing with the `blade menace,' he added. He wanted courts to take decisions with social understanding in such issues and said the police would have to interfere in cases where the victims were physically threatened by the mafia.

    Mr. Vijayan stressed the need to form a special force to tackle economic offences. He called for the setting up of a body on the lines of the Securities and Exchange Board of India (SEBI) to control the functioning of non-banking financial organisations.

    UPA policies blamed

    A series of developments had led to the rise of the blade mafia in the State, Mr. Vijayan said pointing out that the polices being followed by the United Progressive Alliance (UPA) Government at the Centre, including the decision to keep out banking services from the rural sector, were key to the present situation. Now, the move was to allow private sector organisations to work as agents for commercial banks in the rural sector. This meant that the moneylenders would get even administrative cover, he said.

    Cooperative sector

    Kerala would be the worst affected by the policy of weakening the cooperative sector being implemented by the UPA Government, Mr. Vijayan said. A strong and socially committed cooperative sector would go a long way in shielding poorer sections and the farming community from the clutches of the loan sharks. However, the decision to make cooperative banks liable to pay income tax would affect the profitability and viability of many of the banks, he added.

    In boarder villages, poor farmers and the plantation labour were at the mercy of the blade mafia functioning from across the border. They never had any documents, neither would they be present within the State. The help of the police force was essential in tackling their menace, he said.

    A policy change that would ensure remunerative price for farm products was another basic need in keeping the blade mafia at bay. The rise of the blade mafia had a cascading effect on the growth of underworld gangster groups and these were mutually abetting their growth, he said.

    DYFI State president P. Sreeramakrishnan presided over the function. Former High Court judge D. Sreedevi delivered the keynote address.